Thailand’s largest ever IPO a done deal

Bangkok’s mass transit company BTS Group Holdings, operator of the city’s elevated rail system Skytrain, has been given the nod by the Thai Securities and Exchange Commission to list its BTS Rail Mass Transit Growth Infrastructure Fund which is expected to raise $2.1 billion from the capital markets.

The IPO is the largest ever in Thailand by volume and comes at a time when the interest in Southeast Asian share sales is surging.

The IPO prospectus has been filed on March 15 and showed commitments from 22 cornerstone investors, including Morgan Stanley Investment Management, Schroder Investment Management and the Thai unit of French insurer AXA Insurance.

Altogether, the cornerstone investors said they will be buying $800 million worth of units, or up to 38 per cent of the fund’s shares. BTS aims to list the fund in mid-April 2013 and will offer 5.79 billion units at 10.40 baht ($0.35) to 10.80 baht each.

According to Thailand’s listing rules, BTS must pay at least 90 per cent of its adjusted net profit as dividends to unit holders. The fund, designed as a business trust, will purchase a stream of Skytrain transit-fare revenue from BTS, providing trust unit-holders with a steady dividend payout.

BTS Group is controlled by the family of Thai property investor Keeree Kanjanapas.